CHICAGO, Feb. 26 /PRNewswire-FirstCall/ -- United States Cellular Corporation (NYSE: USM) reported service revenues of $977.0 million for the fourth quarter of 2008, a 2.0 percent increase from $957.9 million in the comparable period one year ago. In the fourth quarter, U.S. Cellular recorded a $386.7 million impairment discussed later in this release. Although this resulted in a loss for the quarter, the impairment was a non-cash charge and did not affect cash or cash flow.

"We finished the year with some solid operating results, despite difficult economic conditions," said John E. Rooney, U.S. Cellular president and chief executive officer. "We added 41,000 net retail postpay customers in the quarter, postpay being the market segment we focus on given our high customer satisfaction model. In fact, 95 percent of our retail customers are postpay. Spending on advertising and promotions remained high given the aggressive competition and waning consumer confidence.

"Data revenues continued to grow nicely in the quarter, increasing 32 percent and representing 14.5 percent of service revenues," Rooney continued. "Smart phone sales are up sharply and carry higher ARPU due to data packages. ARPU has increased year over year for 13 consecutive quarters."

"In 2008, U.S. Cellular continued to improve its handset selection and rolled out five new smart phone models and one premium touchscreen phone," said Jay M. Ellison, U.S. Cellular executive vice president and chief operating officer. "Additionally, to support the growing demand for data, we have in place a Mobile Broadband (EVDO Rev. A) network that was available to approximately 23 percent of our cell sites at year end, and will cover more than 60 percent of our cell sites by the end of 2009. Our broad suite of handsets, coupled with the 3G speeds of Mobile Broadband, provide customers an ideal data experience. We also expanded our network during the year, adding nearly 500 cell sites and ending the year with approximately 6,900 cell sites in service."

OUTLOOK

"For 2009," continued Jack Rooney, "we intend to not only retain and grow our customer base, but also invest in the company on a number of fronts, so that we emerge from the economic downturn stronger than ever. In addition to the continued overlay of EVDO, we are pursuing a number of multi-year initiatives to make this happen."

The initiatives include:

-- A new point-of-sale system to consolidate billing on one platform. This will enable reduced time to market and improved testing capabilities, and give U.S. Cellular the ability to develop more flexible pricing and services.

-- Development of an Electronic Data Warehouse/Customer Relationship Management (EDW/CRM) System. This system will allow U.S. Cellular to collect and analyze information more efficiently to build and improve customer relationships.

-- An Internet/Web initiative that will enable customers to make a wide range of transactions and, eventually, to manage their accounts online.

SFAS 142 Impairment Charge

U.S. Cellular recorded an impairment of licenses of $386.7 million (pre- tax) in the fourth quarter of 2008 in accordance with Statement of Financial Accounting Standards, "Goodwill and Other Intangible Assets" ("SFAS No. 142").

The impairment charge had no impact on cash or cash flow.

In accordance with SFAS No. 142, U.S. Cellular performed its annual impairment test of licenses and goodwill in the second quarter of 2008 and concluded at the time that there was no impairment. As a result of the further deterioration in the credit and financial markets and the accelerated decline in the overall economy in the fourth quarter of 2008, U.S. Cellular updated its impairment assessment of licenses and goodwill as of Dec. 31, 2008. The impairment assessment resulted in a $386.7 million impairment to licenses and no impairment to goodwill.

Material Weakness Eliminated

In the fourth quarter of 2008, U.S. Cellular and Telephone and Data Systems, Inc. (NYSE: TDS, TDS.S) completed the implementation of previously reported enhanced internal controls related to income tax accounting. TDS provides shared services to U.S. Cellular, including assistance with accounting for income taxes. These controls are operating effectively and, as a result, the company no longer has a material weakness related to income taxes.

Guidance

Guidance for the year ending Dec. 31, 2009 is as follows. There can be no assurance that final results will not differ materially from this guidance.

U.S. Cellular 2009 guidance as of Feb. 26, 2009 is as follows:
Net Retail Customer Additions 75,000-150,000
Service Revenues $3,900-$4,000 million
Operating Income $275-$350 million
Depreciation, Amortization and Accretion(1) Approx. $600 million
Capital Expenditures Approx. $575 million
(1) Includes losses on disposals of assets

The foregoing guidance represents the views of management as of Feb. 26, 2009 and should not be assumed to be accurate as of any other date. U.S. Cellular undertakes no legal duty to update such information, whether as a result of new information, future events, or otherwise.

Conference Call Information

U.S. Cellular will hold a conference call on Feb. 26, 2009 at 10:00 a.m. Chicago time.

-- Access the call by phone at 800/706-9695 (US/Canada) and use conference ID 86129191.

Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of http://www.uscellular.com, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. The call will be archived on the Conference Calls page of http://www.uscellular.com.

About U.S. Cellular(R)

United States Cellular Corporation, the nation's fifth-largest, full- service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to nearly 6.2 million customers in 26 states. The Chicago-based company employed 8,500 full-time equivalent associates as of Dec. 31, 2008. For more information about U.S. Cellular, visit http://www.uscellular.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates and expectations. These statements are based on current estimates, projections and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: The ability of the company to successfully grow its markets; the current credit crisis affecting financial markets, and its effect on the overall economy; changes in the overall economy, competition, the state and federal telecommunications regulatory environment, and the value of assets and investments; adverse changes in the ratings afforded the company's debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; risks and uncertainties relating to possible future restatements; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming revenue and terms, the availability of handset devices and the mix of products and services offered by the company. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by U.S. Cellular to furnish this press release to the SEC, which are incorporated by reference herein.

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